From CSR to Sustainable Business - What are companies doing, and why


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A presentation given to 400 business students and professors in Guadalajara, Mexico on September 19 2013. It covers: CSR definitions, trends now and in the future, company case studies, the business case for CSR and sustainability and the issues of the future. Looks at Marks & Spencer, Unilever, Siemens, General Electric company

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From CSR to Sustainable Business - What are companies doing, and why

  1. 1. From  CSR  to  Sustainable  Business:   What  are  companies  doing,  and  why     Toby  Webb,  Founder,  Ethical  Corpora7on  and  Stakeholder   Intelligence.  Lecturer,  Corporate  Responsibility,  Birkbeck,   University  of  London     Tecnológico  de  Monterrey,  Mexico,  September  2013  
  2. 2. What  is  CSR  today?   •  CSR  IS  NOT  PHILANTHROPY     •  Ethics  *  Integrity  *  Products  *   Services  *  Consumers  *  Investors   *  An7-­‐corrup7on  *  Suppliers  *   Tax  payments  *  Market  Ethics  *   Employees  *  Civil  society  *   Poli7cs  and  the  Environment… and  more…   •  CSR  is  not  about  how  you  give   your  money  away   •  It  is  about  how  you  make  it   •  “CSR  is  about  how  you  run  your   business  when  no-­‐one  is   watching”  
  3. 3. What  are  the  CSR  trends  today?   •  More  compliance     •  BeWer  governance   •  Improved  trust     •  Cost  reduc7on   •  Co-­‐ope77on    
  4. 4. What  are  the  (addi?onal)  trends   tomorrow?   •  Resource  constraints   (popula7on,  materials,   climate  change)   •  Licence  to  Operate   •  Collabora7on  for   systems  change     •  Ins7tu7onal,  trade  and   poli7cal  improvements   •  Impact  measurement  
  5. 5. Who  are  some  of  the  leaders?   •  Unilever  -­‐  Ten  year  journey   towards  sustainable  growth  –  The   Sustainable  Living  Plan   •  Applies  right  across  the  value   chain   •  Responsibility  for  own  direct   opera?ons  (social/enviro)   •  Also  for  suppliers,  distributors   and  how  consumers  use  Unilever   brands   •  Underpinning  the  Plan  are  around   60  very  tough  business  targets  
  6. 6.                 So  what  do  they  actually  want  to  do?     •  Bring  safe  drinking  water  to  500  million  people   •  Increase  propor7on  of  product  por^olio  that  meets  highest   nutri?onal  standards  (22%  in  2010  to  25%  in  2011)   •  Halve  the  greenhouse  gas  impact  of  products  across  the   lifecycle  by  2020   •  2020:  Source  100%  of  agricultural  raw  materials  sustainably   (36%  in  2012)  
  7. 7. Business  Benefits  of  Sustainability                  
  8. 8. Marks  &  Spencer   •  Launched  Plan  A  in  2007.   100  commitments  to   achieve  in  5  years     •  Now  extended  Plan  A  to   180  commitments  to   achieve  by  2015.   •  139  achieved  so  far   •  Ul7mate  goal  of  becoming   the  world's  most   sustainable  major  retailer   •  Sustainability  work  has   driven  profits  as  well  as  cut   costs     •  2012:  £135m  NET  BENEFIT   (29%  increase  year  on  year)    
  9. 9. Launched  in  2007:  “Ten  years  of  incrementalism  leading  to  transforma?on”  
  10. 10. Who  are  some  of  the  leaders?   •  General  Electric:  Eco-­‐ Innova7on  as  business   strategy   •  Ecomagina?on:   Mainstream  focus  on   business  innova7on  and   sustainable  industrial   products         •  $2.3  billion  invested  in   “Ecomagina7on”  products   in  2011   •  Reduced  GHG  emissions   30%  since  2004   •  Reduced  wastewater  by     45%  since  2006  
  11. 11. Who  are  some  of  the  leaders?   2011  -­‐  Siemens  reorganised   opera7ons  into  four  core   business  units:     •  Energy  -­‐  efficiency  in  energy   produc7on  and  distribu7on,   including  oil,  gas  and   renewables   •  Healthcare  -­‐  supplying   technology  (medical   imaging  equipment  and   healthcare  IT)     •  Industry  -­‐  providing   sojware  and  technology   services     •  Infrastructure  and  ci?es  -­‐   sustainable  technologies   (smart  grid  equipment  and   rail  vehicles)    
  12. 12. Siemens  and  Green  Business  Strategy   •  2011:  Products  and   solu7ons  in   Environmental  Por^olio   generated  revenue  of   €29.9  billion:  41%  of  total   revenue   •  Objec7ve:  Grow  annual   revenue  to  €40  billion  by   2014  –with  new,   innova7ve  products  and   excep7onal  growth  in   fields  like  renewable   energy  
  13. 13. Why  do  they  choose  to  lead?   Unilever       Marks  and  Spencer         General  Electric       Siemens         •  Securing  supply   •  Customer  trust   •  Low  carbon  future     •  Urbanisa?on       (These  are  not  the  only  reasons!)  
  14. 14. Why  do  they  engage  “stakeholders”?   •  Employee  engagement  drives  innova7on  and  ideas   •  NGO  partnerships  bring  science,  experience,  and  credibility   •  Communi?es  have  increasing  power  &  influence   •  Social  media  means  no  company  escapes  scru7ny   •  Big  business  want  a  long  term  vision  from  Governments:   And  policies  and  incen7ves  that  enable  investment  and   longer  term  planning:  So  must  lead  by  example  
  15. 15. How  do  they  engage  with   stakeholders?   •  Dialogue  with  civil  society   •  Consul?ng  experts  on   agriculture,  trust,  ethics.   urbanisa7on,  climate   change,  energy  futures   •  By  using  guidance  and   standards     •  Listening  to  their   employees   •  Watching  trends  emerge                   ISO  26000  Guidance  ‘Standard’  
  16. 16. How  do  CSR  and  Sustainability  improve  Business?   •  Consumers  want  to  trust  brands,  not  all  the  product  detail   •  Leading  companies  are  turning  sustainability  into   opportunity  all  over  the  world:  Water,  Telecoms,   Commodi7es,  Retail,  Mining,  Construc7on…   •  9  billion  people  means  less  resources.  Innova7on  will  be   essen7al.  The  Circular  Economy  will  be  vitally  important.   •  Corporate  roles  in  changing  inefficient  systems  will  be  vital:   The  winning  companies  recognise  CSR  is  systems  change     •  CSR  and  Sustainability  =  Smarter  business  
  17. 17.                          Harvard  Business  School   Professor  Robert  Eccles,   Harvard  Business  School  
  18. 18. Is  CSR/sustainability  profitable?     London  Business  School  &  Harvard  Business  School  research:       •  Firms  with  beWer  CSR  performance  face  significantly  lower   capital  constraints   •  BeWer  stakeholder  engagement  and  transparency  around  CSR   performance,  are  important  in  further  reducing  capital   constraints     •  That  the  rela7on  is  driven  by  both  the  social  and  the   environmental  dimension  of  CSR   "CORPORATE  SOCIAL  RESPONSIBILITY  AND  ACCESS  TO  FINANCE"  Available  at:  hGp://  
  19. 19. CEOs  agree  with  all  this…   UN  Global  Compact  and   Accenture  CEO  study  2013:     ü 75  CEOs  1-­‐to-­‐1s   ü 1,000  CEO  responses   ü 103  countries     ü 27  industry  sectors     Found  two  clear  CEO   priori?es  for  the  future:         One:  “The  need  for   governments  to  intervene  to   align  global  markets   allowing  companies  to   compete  effec7vely  to  drive   sustainability”     Two:  “To  move  beyond   incremental  change  to   transforma7on  that  delivers   both  sustainability   leadership  and  value   crea7on”    
  20. 20. In  conclusion…   •  CSR  today  =  Sustainable   Business  tomorrow.    BUT:   •  Sustainable  business  does   not  happen  without   Strategy   •  Strategy  does  not  happen   without  good  Governance   •  Good  governance  does  not   happen  without  Ethics   •  Ethics  do  not  happen   without  Stakeholder   Engagement     •  My  final  point:  Successful   sustainable  business  is   based  on  both  ethics  and   open  and  con7nuous   engagement  with  society  
  21. 21. Thank you!